The use of coupons is generally known in consumer sales. Coupons are typically distributed by newspaper or mail and are usually structured to provide a consumer with an incentive to buy a product.
Typically, a coupon provides a discount on the purchase price of an item. The discount may be offered directly by listing a dollar value of the discount on the face of the coupon or indirectly by providing a free premium if the consumer purchases an item. The premium may be an offer for a second item free or the offer of another related (or unrelated) item.
Coupons are typically used by manufacturers to move merchandise that is overstocked or outdated. Coupons allow the manufacture to offer an item at a reduced price without actually changing a list price for an item.
Once a merchant accepts a coupon, the merchant may redeem the coupon for cash or other consideration from the manufacturer. Coupon clearing houses usually perform this function.
In addition to collecting coupons from merchants, the coupon clearing house may count and authenticating the collected coupons. The coupon clearing house may also calculate and request payment of the value of the collected coupons from the manufacturer and forward the money to the merchant. The coupon clearing house usually collects a commission from the manufacture based upon the value of the coupons cashed.
While coupons work well in helping manufacturers dispose of merchandise, the handling of coupons is burdensome and subject to fraud. Accordingly, a need exists for a less labor-intensive method of generating and processing coupons.